USD/MXN rises despite US dollar weakness
|- Mexican peso drops even as sentiment toward emerging market currencies improves.
- USD/MXN rebounds from 3-week lows and finds resistance under 18.90.
The Mexican peso failed to benefit on Thursday form a weaker US dollar and retreat after hitting yesterday the highest level in three weeks. The USD/MXN pair rose from 18.70 to 18.88 and then pulled back to the 18.80 area, where it was trading.
The move higher took place despite the slide of the US Dollar across the board. The DXY dropped below 94.00 for the first time since July and the greenback also lost ground against emerging market currencies. The Chilean peso had the best performance in months, the Argentinean peso rose more than 3%, the South African rand 2.70% and the Brazilian real 1.15%.
The Mexican peso was among the worst performers, probably affected by a slide in crude oil prices and the ongoing uncertainty about NAFTA negotiations. Talks continued between the US and Canada with officials showing optimism but no final deal is seen yet.
USD/MXN Levels to watch
To the upside, immediate resistance is seen at the 18.90 level followed by 18.95 (downtrend line) and 19.15. On the flip side, 18.70 has become the key short-term support. A consolidation below that level could open the way for a move to 18.50.
The bias continues to favor the downside with the price holding in a descendant channel. A break above 18.90 could remove the tone and signal more gains for the US dollar or the beginning of a consolidation phase.
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